More Leads Aren’t Better If They’re Burning Your Budget
Getting more leads feels like progress. But if you're paying too much for each one (or if those leads aren’t turning into booked jobs) then your marketing isn't growing your business. It's draining it.
Unfortunately, many home service business owners don’t know whether their lead cost is “normal,” let alone profitable. That’s no accident. Some marketing companies count on you not asking.
This article will help you cut through the confusion and figure out if you're getting fair value, or overpaying for leads that aren’t delivering.
1. What Counts as a Lead (And What Doesn’t)
Before you can judge lead cost, you need to define a lead.
A lead is someone who reaches out directly (calls, fills out a form, books online) with clear interest in your services.
Not leads:
- “Impressions” or “views”
- Someone who clicked but didn’t call
- Traffic from out-of-area customers you can’t serve
- Spam or bot submissions
If your agency is charging you based on leads, make sure they’re only counting real, qualified inquiries.
2. The Cost-Per-Lead Benchmarks for Home Services
While numbers vary by market and service type, most home service businesses should aim for:
- $25–$50 per lead – Excellent
- $50–$100 per lead – Acceptable
- $100–$150+ per lead – High, but can be worth it for big-ticket jobs
- Over $500 per lead – Red flag (unless it’s a very high-margin niche like solar or remodeling)
These numbers are based on digital sources like Google Ads, SEO, and Facebook - not third-party lead sellers or aggregators (which we’ll cover next).
3. Are You Buying or Renting Leads?
Here’s a trap many contractors fall into: paying top dollar for shared leads from companies like HomeAdvisor, Angi, or Thumbtack. You’re often bidding against other pros, racing to call back first, and competing on price.
Yes, they might only cost $40–$60 each, but if you're only closing 1 in 5, your true cost per job is $200–$300. Not to mention the time you waste chasing low-intent leads.
Quick test:
- Are you buying leads from a platform where multiple companies get the same info?
- Are you being charged whether or not the lead books?
- Are you required to follow up immediately to win?
If yes, you’re renting visibility, not building your own pipeline. And you're likely overpaying in both dollars and frustration.
4. What a Good Lead Looks Like (And How to Improve Yours)
Good leads are:
- In your service area
- Ready to book soon
- Aware of what you do
- Reaching out through your own branded presence
You get better leads by:
- Owning your traffic (via your website, local SEO, and direct-response ads)
- Running targeted campaigns with service-specific landing pages
- Using clear messaging and a strong call to action
- Reviewing where your best customers are coming from—and investing there
When you improve the quality of your leads, your close rate goes up—and your cost per booked job goes down.
5. The Real Math: Cost Per Booked Job
Let’s say you’re paying $80 per lead. If your booking rate is 50%, your cost per booked job is $160. Now compare that to your average ticket.
If your average job is $400–600, you’re still profitable. But if it’s $250 and you’re spending $160 to book it, your margins vanish fast.
Always ask:
- How many leads are turning into jobs?
- What’s the average cost per booked job, not just per lead?
- Can we lower this by improving conversions or lead quality?
Final Word: Paying for Leads Should Make You Money, Not Stress You Out
If your marketing is working, you should feel confident (not nervous) about investing in it.
A good lead is worth paying for. A bad one is a black hole. Know your numbers. Ask questions. And don’t let anyone charge you premium prices for junk traffic.
If you're unsure, start tracking:
- Leads by source
- Cost per lead
- Booking rate per source
- Cost per booked job
That’s how you tell the difference between smart marketing, and expensive guessing.
